We help ADF Members looking for a Bridging Loan
Navigating the complexities of buying and selling a home can be particularly challenging for current and former Australian Defence Force (ADF) members. At Defence Loans, we understand these unique challenges and strive to provide tailored financial solutions, including Bridging Loans. Bridging Loans are designed to help you bridge the gap between selling your existing property and purchasing a new one, ensuring a smooth transition without financial strain.
Bridging Loans offer a practical solution when you find yourself in the dilemma of whether to buy or sell first. With our extensive network, we help you access Bridging Loan options from banks and lenders across Australia. This allows for flexibility in managing your finances during this critical period. The loan term for a Bridging Loan usually spans 6 to 12 months to sell your existing property, extending up to 12 months if you are building a new home.
One of the primary benefits of a Bridging Loan is that it allows you to move into your new home without waiting for your current property to sell, reducing the stress associated with relocating. When calculating Bridging Loan repayments, a key factor to consider is the loan to value ratio (LVR). This ratio will affect your borrowing capacity and the interest rate you receive. Typically, the loan interest rate can be either fixed or variable, depending on your preference and financial situation.
Interest rates play a crucial role in determining the affordability of a Bridging Loan. Many lenders offer interest rate discounts as part of their Bridging Loan options, which can significantly lower your overall costs. It's important to understand the differences between fixed interest rate loans and variable interest rate loans to choose the best option for your needs.
Lenders mortgage insurance (LMI) is another critical aspect to consider. If your LVR exceeds 80%, you may be required to pay LMI, which can add to your overall expenses. However, this insurance protects the lender in case of default, making it easier for you to secure the loan.
Applying for a Bridging Loan involves several steps, beginning with getting pre-approved. Loan pre-approval gives you a clear understanding of how much you can borrow, helping you set realistic expectations when searching for your new home. The application process typically requires detailed documentation, including bank statements and proof of income. At Defence Loans, we aim to offer a streamlined application process, ensuring that you can secure the funds you need with minimal hassle.
Once pre-approved, you can proceed with purchasing your new home while your current property is on the market. The loan amount will include what is known as Peak Debt, which covers the contract purchase price of the new home plus any outstanding mortgage on the existing property. As soon as your old home sells, this amount is reduced to End Debt, which is the final balance of your new home loan.
It's also worth noting that many Bridging Loans come with an offset account feature. This allows you to reduce the amount of interest payable by offsetting your loan balance against any funds held in your account. This feature can be particularly beneficial in managing your short-term loans during the transitional period.
When considering whether to buy or sell first, it’s essential to factor in local property market conditions, stamp duty costs, and your overall financial situation. Each scenario has its advantages and risks, and a Bridging Loan can provide that extra layer of flexibility needed to make an informed decision.
Defence Loans is here to support you through every step of this journey. By offering access to various Bridging Loan options from reputable banks and lenders across Australia, we ensure that our clients can make well-informed decisions with confidence.
Our team is committed to helping you secure the best possible terms for your Bridging Loan. Contact us today to get pre-approved and take the next step towards securing your dream home while smoothly transitioning from your current property. Let us help you bridge the gap with ease and confidence.
